Board of Financial Control for Buncombe County v. Union Property Co.

Decision Date17 July 1937
Citation114 S.W.2d 61,21 Tenn.App. 634
PartiesBOARD OF FINANCIAL CONTROL FOR BUNCOMBE COUNTY v. UNION PROPERTY CO. et al.
CourtTennessee Court of Appeals

Certiorari Denied by Supreme Court Jan. 15, 1938.

Appeal from Chancery Court, Davidson County, Part 2; James B Newman, Chancellor.

Suit by the Board of Financial Control for Buncombe County, judgment creditor of the Union Property Company and another, against the Nashville Trust Company, garnishee, to recover property allegedly belonging to the judgment debtors, wherein the garnishee claimed a set-off. The Mortgage Loan & Investment Company, having acquired the assets of the Board of Financial Control of Buncombe County, was substituted as complainant. From a decree for the garnishee, the Mortgage Loan & Investment Company appeals.

Reversed and rendered.

Pitts McConnico, Hatcher & Waller, of Nashville, for appellant.

Cornelius McKinney & Gilbert, of Nashville, for appellee.

FAW Presiding Judge.

This record presents a controversy between a judgment creditor and a garnishee. The chancellor dismissed the garnishment and the judgment creditor appealed to this court and has assigned error here.

By decree entered in this cause on May 12, 1933, the chancery court of Davidson county, part 2, adjudged and decreed that the complainant Board of Financial Control for Buncombe County, a North Carolina corporation, have and recover of the defendants Union Property Company, a Tennessee corporation, and Stuart Kritzky, the sum of $28,571.33 and all the costs of the cause, for all of which execution was awarded.

Pursuant to the aforesaid judgment, a fieri facias issued to the sheriff of Davidson county on November 18, 1935, and by virtue of said execution a garnishment notice in accordance with the provisions of the Code, §§ 8946, 8947, was served upon the Nashville Trust Company, and, on November 29, 1935, said garnishee filed an answer, verified by the oath of its secretary, which answer is as follows:

"Answer of Nashville Trust Company, Garnishee. On November 26, 1935, the Sheriff of Davidson County, Tennessee, served notice on the Nashville Trust Company, reciting that by virtue of an execution in the above styled cause your respondent should answer on November 29, 1935, before the Honorable Clerk of this Court, the following questions touching the property and effects of the Union Property Company;
"1st. 'Whether you were at the time of serving this garnishment indebted to the said Union Property Company, Inc., and if so, how and to what amount;
"2nd. 'Whether you had in your possession, or under your control, any property, debts, or effects belonging to the said Union Property Company, Inc., at the time of serving this notice; or at the time of answering, or at any time between the date of service and the time of answering, and if so, the kind and amount;
"3rd. 'Whether there are to your knowledge and belief, and, what property, debts and effects in the possession or under the control of any other, and what person.'
"As its answer to such garnishment, the Nashville Trust Company respectfully shows to the Court: "The Union Property Company, by a certain deed of trust dated May 28, 1930, and recorded in Book 708, page 538, Register's Office for Davidson County, Tennessee, conveyed to Charles Nelson, Vice-President of the Nashville Trust Company, and his successors in office, as Trustee, with power in said Trustee to sell, a certain lot or parcel of real estate in Davidson County, Tennessee, described in said deed of trust. Said deed of trust was made to secure the Nashville Trust Company of Nashville, Tennessee, in the payment of the principal sum of $150,000.00 and interest from date at the rate of 6% per annum.
"Your respondent would further show that on May 2, 1932, foreclosure having taken place, after default by the Union Property Company and in accordance with the terms of said deed of trust, said property was sold to the Nashboro Property Company, a Tennessee corporation, of Nashville, Tennessee, for $150,000.00 cash, and Charles Nelson, Vice-President of the Nashville Trust Company, Trustee, accordingly executed to the Nashboro Property Company a deed to the real estate described in the deed of trust aforesaid.
"Respondent would now show that subsequent to said foreclosure sale there came into the hands of the Nashville Trust Company certain sums of money belonging to the Union Property Company which were deposited to the credit of said Union Property Company and amounted to $1,262.16.
"Respondent would show that the amount of the indebtedness owing by the Union Property Company to the Nashville Trust Company on May 2, 1932, the date of the foreclosure above mentioned, was in excess of $150,000.00, the amount bid at the foreclosure sale, such excess amounting to more than $1,262.16. Furthermore, since Charles Nelson, Vice-President of the Nashville Trust Company, had acted as Trustee in said foreclosure sale, said Nashville Trust Company became entitled to receive, in addition to its debt, a Trustee's fee and other expenses of foreclosure, which greatly exceeded $1,262.16.
"For the reasons above set out, your respondent, in answer to the questions which it is required to answer as garnishee by the garnishment served on it on November 26, 1936, as aforesaid, answering says:
"1st. The Nashville Trust Company was not indebted to the said Union Property Company at the time of the serving of the garnishment in any amount whatsoever, but, on the contrary, the Union Property Company was on said date of November 26, 1935, indebted to the Nashville Trust Company in an amount in excess of the deposit of $1,262.16 standing on the books of the Nashville Trust Company to the credit of the Union Property Company.
"2nd. The Nashville Trust Company did not have at the time of the serving of the garnishment, does not have at the time of the filing of this answer, or at any time between the date of service and the time of answering, in its possession or under its control, any property, debts or effects belonging to the said Union Property Company, except the deposit of $1,262.16 above mentioned, which the Nashville Trust Company is entitled to claim and apply as a credit on the indebtedness of the Union Property Company to it, in accordance with the law of Tennessee pertaining to set-off.
"3rd. To the best of the knowledge and belief of the Nashville Trust Company, there are no property, debts or effects in possession or under the control of any other person which belong to the Union Property Company.
"And now having fully answered said garnishment, the Nashville Trust Company prays to be hence dismissed with its reasonable costs."

On January 10, 1936, an order was entered in the cause as follows:

"In this cause it appearing that complainant desires to controvert the facts and conclusions of law stated and relied upon in the answer of Nashville Trust Company, Garnishee, filed in this cause on November 29, 1935, under execution No. 50255, it is ordered by the Court, by consent of the parties, that the complainant be and is given leave to cross examine Warner McNeilly, the Secretary of the Nashville Trust Company, Garnishee, and that the parties take and file such other proof upon the issues as may be desired for presentation to the Court, in order that said issues may be determined."

The deposition of W. W. McNeilly, secretary of the garnishee corporation, was taken and filed, and, by stipulation, a copy of the deed of trust mentioned in the aforesaid, answer of the garnishee was filed as evidence, and, upon the record made up as aforesaid, the chancellor heard the cause, and his decree was entered on May 7, 1936, as follows:

"In this cause came the complainant and joined issues on the allegations in the answer of Nashville Trust Company, Garnishee, claiming a set-off, whereupon the cause came on to be heard before Chancellor James B. Newman, upon the proof and the entire record, and upon consideration thereof, it is ordered, adjudged and decreed by the Court that said Nashville Trust Company, Garnishee, is entitled to a set-off for a Trustee's fee in an amount in excess of the amount in its hands to the credit of defendant, Union Property Company, and that the garnishment be and hereby is accordingly dismissed.

"To the foregoing action of the Court the complainant excepts and prays an appeal to the Court of Appeals, Middle Section, at Nashville, which is granted upon complainant executing an appeal bond in the sum of $250.00 conditioned as required by law. In the event the appeal is perfected, the Clerk and Master shall attach the exhibits to the transcript in their original form."

On May 26, 1936, a consent order signed by counsel for all the interested parties, respectively, was entered in the cause, as follows:

"In this cause it appearing from statement of counsel that Mortgage Loan & Investment Company, a North Carolina corporation with principal office and place of business in Asheville, North Carolina, has acquired the assets of Board of Financial Control of Buncombe County, North Carolina, including the note and decree thereon in this cause, it is accordingly ordered, adjudged and decreed that said Mortgage Loan & Investment Company be and hereby is substituted as complainant herein, and as such is authorized to perfect the appeal in this case as previously authorized. This order is by consent as evidenced by the signatures hereto of the solicitors for the parties in interest."

The Mortgage Loan & Investment Company accordingly perfected the appeal by filing an appeal bond on May 26, 1936, and in this court it has filed a single assignment of error, that "the Chancellor erred in decreeing that the...

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